Adani Group prepays $2.15 billion share-backed financing, $500 million bridge loan for Ambuja acquisition – EQ Mag
The quick completion of the entire prepayment program of USD 2.65 billion within six weeks is Adani’s way to reassure investors of the strong liquidity management and access to capital at the sponsor level.
Adani Group has announced that it has completed the full prepayment of margin-linked share-backed financing, amounting to USD 2.15 billion, ahead of the committed timeline of March 31, 2023. This move is a part of the company’s commitment to repay the promoter’s leverage and to reassure investor confidence after Hindenburg’s report.
Additionally, the promoters have also prepaid the USD 500 million facility taken for Ambuja acquisition financing, in line with their commitment to increase equity contribution. As a result, the promoters have infused USD 2.6 billion out of the total acquisition value of USD 6.6 billion for Ambuja and ACC.
The quick completion of the entire prepayment program of USD 2.65 billion within six weeks is Adani’s way to reassure investors of the strong liquidity management and access to capital at the sponsor level. This also supplements the solid capital prudence adopted at all portfolio companies.
The move reflects the company’s efforts to improve its financial position and strengthen its balance sheet. It also sends a positive signal to the market about the company’s financial health which is much needed after the Hindenburg report debacle.
Adani Group has been focusing on reducing its debt and improving its financial position. In November 2021, the group announced that it would reduce its net debt to zero within the next two years.
Adani-Hindenburg debacle
In January of 2023, Hindenburg Research published a two-year investigation’s findings, alleging that Adani had participated in market manipulation and accounting malpractices. The report accused Adani of perpetrating “the largest con in corporate history,” engaging in “brazen stock manipulation and accounting fraud scheme over the course of decades.” Hindenburg also revealed that it held short positions on Adani Group companies.
A few days later, Adani issued a 413-page response to the Hindenburg report, denouncing Hindenburg’s conduct as a “calculated securities fraud” and the report as a “calculated attack on India, the independence, integrity, and quality of Indian institutions, and the growth story and ambition of India.”
Hindenburg characterized Adani’s response as a failure to address the issues raised in the initial report, and an attempt to obscure the matter under the guise of nationalism.
Following the publication of the Hindenburg report in January 2023, the Adani Group experienced a significant decline in its total market capitalization or m-cap, with a loss of over Rs 12 trillion ($145 billion) in just one month. This represented a 63 per cent reduction from its initial value of Rs 19.2 trillion. However, the Adani Group’s stocks have since sharply recovered from their lowest points.
Source: PTI
